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EXHIBIT 10.45
MARKETING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT is made by and between Xxxxxx Laboratories, an Illinois
corporation having its principal place of business at 000 Xxxxxx Xxxx Xxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000-0000 ("Abbott"), and i-STAT Corporation, a Delaware
corporation having its principal place of business at 000 Xxxxxxx Xxxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000 ("i-STAT").
WITNESSETH:
WHEREAS, i-STAT develops, manufactures and sells medical diagnostic
products for point-of-care blood analysis;
WHEREAS, i-STAT has entered into a Distribution Agreement with FUSO
Pharmaceutical Industries, Ltd. and JCR Pharmaceutical Co., Ltd. (together
"FUSO") dated August 23, 1988 ("FUSO Agreement") for the distribution of certain
of such i-STAT products in Japan, South Korea and Taiwan;
WHEREAS, i-STAT has entered into a Distribution Agreement with
Hewlett-Packard Company ("HP") dated July 28, 1995 ("HP Agreement") for the
distribution of certain of such i-STAT products in Europe, the Middle East and
Africa;
WHEREAS, i-STAT wishes to expand its worldwide sales of certain of such
products through an additional distribution arrangement;
WHEREAS, Abbott, through its Diagnostics Division ("ADD"), is engaged
in the development, manufacture, marketing and distribution of medical
diagnostic products;
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WHEREAS, Abbott desires to become a worldwide distributor of certain of
such i-STAT products;
WHEREAS, in accordance with the terms and conditions hereof, i-STAT is
willing to appoint Abbott as a worldwide distributor of all such products, and
Abbott is willing to accept such appointment;
WHEREAS, concurrent with this Agreement, Abbott and i-STAT are
executing a stock purchase agreement and other related agreements by which
Abbott will acquire a minority ownership interest in i-STAT ("Stock Purchase
Agreements"); and
WHEREAS, concurrent with this Agreement, Abbott and i-STAT are
executing a research and development agreement by which Abbott will fund joint
research and development projects designed to develop for commercialization by
Abbott additional medical diagnostic products ("Funded Research & Development
and License Agreement" and, together with this Agreement and the Stock Purchase
Agreements, the "Alliance Agreements").
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and upon the terms and subject to conditions set forth below,
Abbott and i-STAT hereby agree as follows:
ARTICLE 1 - DEFINITIONS
The following words and phrases, when used herein with initial capital
letters, shall have the meanings set forth or referenced below:
1.1 "Actual Cartridge Purchase Price" shall mean the price for
Cartridges (as hereinafter defined) purchased hereunder by
Abbott and its Affiliates (as hereinafter defined)
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from i-STAT and its Affiliates calculated during the year-end
reconciliation described in Section 5.3.
1.2 "Additional Units" shall mean the number of Cartridges
purchased hereunder by Abbott and its Affiliates from i-STAT
and its Affiliates in a Contract Year (as hereinafter defined)
that exceeds the Estimated Volume of Cartridges, all of which
is more fully described in Section 5.5.
1.3 "Affiliate" shall mean, with respect to each Party (as
hereinafter defined), any legal entity which is, directly or
indirectly, controlling, controlled by or under common control
with such Party. For purposes of this definition, a Party
shall be deemed to control another entity if it owns or
controls, directly or indirectly, more than fifty percent
(50%) of the voting equity of the other entity (or other
comparable ownership interest for an entity other than a
corporation).
1.4 "Analyte" shall mean an individual compound, protein or
fragment thereof, or substance which is the target of
quantitative or qualitative measurement.
1.5 "Analyzer" shall mean a device that processes Cartridges and
is capable of detecting at least one (1) Analyte for use in
the Field, including analyzers integrated into in vitro
diagnostic devices, but excluding analyzers which are not
integrated into in vitro diagnostic devices, which devices are
devices designed primarily for the delivery of patient care
(e.g., the monitors currently being marketed and distributed
by HP pursuant to a license from i-STAT).
1.6 "Ancillary Products" shall mean any hardware (not including
Cartridges) and/or software that is not part of an Analyzer,
but is essential to the use of an Analyzer (e.g., a simulator
device used for testing Analyzers by simulating certain of the
electrical characteristics
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of a Cartridge or by some other testing means), and which is
identified on Schedule 1.6, as may be amended from time to
time.
1.7 "Annualized" shall mean the number being measured during the
Base Period divided by the number of days in the Base Period
times three hundred sixty-five (365).
1.8 "AUP" shall mean average unit selling price.
1.9 "Base AUP" shall mean the Net Sales (as hereinafter defined)
of Cartridges sold by i-STAT and its Affiliates in the Field
(as hereinafter defined) in the United States (as hereinafter
defined) to Base Customers (as hereinafter defined) *** (as
hereinafter defined), divided by the number of Cartridges sold
by i-STAT and its Affiliates in the United States to Base
Customers ***.
1.10 "Base Customers" shall mean customers that purchased
Cartridges from i-STAT and its Affiliates under Third Party
Agreements (as hereinafter defined) for use in the Field in
the United States as of the Starting Date.
1.11 "Base Fully Burdened Manufacturing Cost" shall mean ***
*** Confidential treatment requested
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1.12 "Base Period" shall mean the period from and including January
1, 1998, until, but not including, the Starting Date.
1.13 "Base Sales" shall mean the Annualized Net Sales of i-STAT
Products (as hereinafter defined) by i-STAT and its Affiliates
in the Field in the United States.
1.14 "Base Units" shall mean the Annualized number of Cartridges
sold by i-STAT and its Affiliates in the Field in the United
States.
1.15 "Book Value" shall mean the Purchase Price (as hereinafter
defined) of the Analyzers, less accumulated depreciation based
on a depreciation schedule determined in accordance with
Xxxxxx'x standard accounting procedures, but not to exceed
four (4) years.
1.16 "Business" shall mean the promotion, marketing, distribution
and sale of i-STAT Products by i-STAT and its Affiliates in
the Field in the United States.
1.17 "Business Day" means any day other than a day which is a
Saturday or Sunday or other day on which commercial banks in
New York, New York are authorized or required to remain
closed.
1.18 "Calendar Quarter" shall mean a period of three (3)
consecutive calendar months commencing on January 1, April 1,
July 1 or October 1 of any Contract Year.
1.19 "Cartridge" shall mean the disposable component of a Product
(as hereinafter defined) that contains i-STAT Sensors (as
hereinafter defined) and fluid handling channels and operate
on the Analyzer or any other analyzer or integrated device
sold by a Third Party (as hereinafter defined) under an
agreement with i-STAT.
1.20 "Certificate of Analysis" shall mean finished goods test
results accompanying the release of Products.
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1.21 "Change of Control" shall mean: (a) the consolidation or
merger of i-STAT or any Affiliate of i-STAT with or into any
Third Party wherein the shareholders of i-STAT immediately
prior to such transaction shall cease to be the holders of at
least fifty percent (50%) of the outstanding securities of the
surviving corporation in such transaction; (b) the assignment,
sale, transfer, lease or other disposition of all or
substantially all of the assets of i-STAT; or (c) the
acquisition by any Third Party or group of Third Parties
acting in concert, of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission
("SEC") under the Securities and Exchange Act of 1934) of more
than fifty percent (50%) of the outstanding shares of voting
stock of i-STAT.
1.22 "Closing" shall mean the closing of the transaction provided
for in this Agreement, as more fully described in Section 8.1.
1.23 "Closing Date" shall mean the date on which the Closing
occurs.
1.24 "Co-exclusive FUSO Territory" shall mean the territory into
which FUSO currently has the right to distribute certain
i-STAT Products on a non-exclusive basis pursuant to the FUSO
Agreement, which territory shall be reduced from time to time
pursuant to Sections 2.1 and 2.2. As of the Signing Date (as
hereinafter defined), the Co-exclusive FUSO Territory consists
of Japan, South Korea and Taiwan.
1.25 "Confidential Information" shall mean any and all technical
data, information, materials and other know-how, including
Trade Secrets (as hereinafter defined), presently owned by or
developed by, on behalf of, or derived either directly or
indirectly from Program Technology (as hereinafter defined) of
either Party and/or its Affiliates during the Term (as
hereinafter defined) which relates to a Product, its
development, manufacture, promotion,
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marketing, distribution, sale or use and any and all financial
data and information relating to the business of either of the
Parties and/or of their Affiliates, which a Party and/or its
Affiliates discloses to the other Party and/or its Affiliates
in writing and identifies as being confidential, or if
disclosed orally, visually or through some other media, is
identified as confidential at the time of disclosure and is
summarized in writing within thirty (30) days of such
disclosure and identified as confidential, except any portion
thereof which:
(a) is known to the receiving Party and/or its Affiliates
at the time of the disclosure, as evidenced by its
written records;
(b) is disclosed to the receiving Party and/or its
Affiliates by a Third Party having a right to make
such disclosure;
(c) becomes patented, published or otherwise part of the
public domain through no fault of the receiving Party
and/or its Affiliates; or
(d) is independently developed by or for the receiving
Party and/or its Affiliates without use of
Confidential Information disclosed hereunder, as
evidenced by its written records.
1.26 "Contract Year" shall mean a calendar year during the Term (as
hereinafter defined), beginning on January 1, except that the
first Contract Year may begin on the Starting Date and shall
end on December 31, 1999.
1.27 "Customer Contracts" shall mean those Third Party Agreements
listed on Schedule 1.27.
1.28 "Designated Country" shall mean a country in the Territory (as
hereinafter defined) outside of the United States to which
Products shall be delivered.
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1.29 "Delivered" and "Delivery" shall have the meanings ascribed to
them in Section 6.1.
1.30 "Distributor Territories" shall mean those countries
identified on Schedule 1.30, as may be amended from time to
time in accordance with the provisions of Section 2.4.
1.31 "Estimated Cartridge Purchase Price" shall mean the weighted
average price for Cartridges purchased by Abbott and its
Affiliates from i-STAT and its Affiliates hereunder, as
determined in accordance with the terms of Section 5.2.
1.32 "Estimated Volume of Cartridges" shall mean the estimated
volume of Cartridges in excess of Base Units *** as specified
in Schedule 5.5.
1.33 "Exclusive Territory" shall mean the Territory, except for the
Co-exclusive FUSO Territory, the HP Territory and the
Distributor Territories, subject to the Co-exclusive FUSO
Territory, the HP Territory and the Distributor Territories,
or portions thereof, becoming part of the "Exclusive
Territory" pursuant to Sections 2.1, 2.2, 2.3 and 2.4.
1.34 "FDA" shall mean the United States Food and Drug
Administration and any successor agency thereto.
1.35 "Field" shall mean the professionally attended human
healthcare delivery market, including, without limitation,
hospitals, physician office laboratories, alternate site
facilities, surgi-centers, emergicare, ambulances and home
care. Subject to Xxxxxx'x right of first negotiation as set
forth in Section 2.5, "Field" shall not include the consumer
self-testing market.
*** Confidential treatment requested
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1.36 "Fully Burdened Manufacturing Costs" shall mean ***
1.37 "FUSO Agreement" shall mean the Distribution Agreement dated
August 23, 1988, between i-STAT and FUSO.
1.38 "FUSO Development Agreement" shall mean the Development
Agreement dated August 23, 1988, between i-STAT and FUSO.
1.39 "FUSO License Agreement" shall mean the Manufacturing License
Agreement dated August 23, 1988, between i-STAT and FUSO.
1.40 "HP Agreement" shall mean the Distribution Agreement dated
July 28, 1995 between i-STAT and HP.
1.41 "HP Exclusivity Period" shall mean the period under the HP
Agreement during which HP shall have exclusive rights to
distribute certain of i-STAT's products, as determined by
Abbott in its sole discretion.
1.42 "HP License Agreement" shall mean the License Agreement dated
July 28, 1995 between i-STAT and HP.
1.43 "HP Stock Purchase Agreement" means the Series B Preferred
Stock Purchase Agreement dated as of June 23, 1995 between
i-STAT and HP.
*** Confidential treatment requested
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1.44 "HP Territory" shall mean the territory into which HP has the
right to distribute certain i-STAT Products pursuant to the HP
Agreement. As of the Signing Date, the HP Territory consists
of the countries set forth on Schedule 1.44.
1.45 "HSR Act" shall mean the United States Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, including all regulations
promulgated thereunder, and any foreign equivalent.
1.46 "Incremental AUP" shall mean the Net Sales of Incremental
Units (as hereinafter defined) sold by Abbott and its
Affiliates in the Territory during a Calendar Quarter divided
by the number of Incremental Units sold by Abbott and its
Affiliates in the Territory during such Calendar Quarter.
1.47 "Incremental Units" shall mean the number of Cartridges
purchased by Abbott and its Affiliates from i-STAT and its
Affiliates hereunder in a Contract Year in excess of the Base
Units.
1.48 "i-STAT Distributors" shall mean Third Parties, other than
FUSO and HP, that, as of the Signing Date, distribute i-STAT
Products in the Distributor Territories, pursuant to
agreements, understandings or arrangements with i-STAT.
1.49 "i-STAT Product" shall mean Analyzers, Cartridges and
Ancillary Products, or any combination of the foregoing, in
the Field, including the manuals, labeling, packaging and
package inserts thereto. For purposes of this Agreement, any
New Product (as hereinafter defined) shall be deemed to be an
"i-STAT Product".
1.50 "i-STAT Sensors" shall mean at least one (1) solid state
potentiometric, amperimetric and/or conductometric microsensor
device or an integrated group of such devices
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designed to detect the presence and/or quantity of at least
one (1) Analyte. ***
1.51 "i-STAT Trademarks" shall mean the trademarks of i-STAT as set
forth in Schedule 1.51.
1.52 "Liabilities" shall mean any claims, damages, losses,
liabilities, debts or obligations of any nature, whether known
or unknown, accrued, absolute, contingent or otherwise, and
whether due or to become due.
1.53 "Minimum Cartridge Purchase Price" shall mean the minimum
price i-STAT shall invoice Abbott and its Affiliates for any
Cartridge as set forth in Schedule 1.53, as may be adjusted in
accordance with the provisions of Section 5.6.
1.54 "Net Sales" shall mean the total of the gross amount billed or
invoiced to Third Parties for the sale of Product, less:
(a) Rebates granted and allowances, trade, quantity or
cash discounts actually allowed and taken;
(b) Retroactive price reductions imposed by government
authorities;
(c) Fees, commissions or rebates lawfully paid pursuant
to contracts with group purchasing organizations;
(d) Amounts actually repaid a Third Party by reason of
rejection or return of defective Product; and
*** Confidential treatment requested
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(e) Upcharges invoiced and paid by Third Parties as part
of a reagent agreement plan or similar arrangement.
1.55 "New Product" shall mean any i-STAT Product or modification or
follow-on to an i-STAT Product intended for use in the Field,
which i-STAT may develop or offer for sale during the Term,
with the exception of Program Products (as hereinafter
defined).
1.56 "Party" shall mean i-STAT or Abbott, and "Parties" shall mean
i-STAT and Abbott.
1.57 "Prepayment" shall mean periodic cash payments made by Abbott
to i-STAT which i-STAT shall credit or repay to Abbott in
accordance with the terms and conditions set forth in Sections
5.5 or 18.3.
1.58 "Product" shall mean i-STAT Products and Program Products.
1.59 "Program Product" shall have the same meaning as is ascribed
to such term under the Funded Research & Development and
License Agreement.
1.60 "Program Technology" shall have the same meaning as is
ascribed to such term under the Funded Research & Development
and License Agreement.
1.61 "Purchase Price" shall mean the price for Analyzers and
Ancillary Products purchased by Abbott and its Affiliates from
i-STAT and its Affiliates hereunder, as more fully described
in Section 5.1.
1.62 "Signing Date" shall mean the last date on which a Party
executes this Agreement.
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1.63 "Specifications" shall mean the Product characteristics set
forth in Schedule 1.63, and New Product and Program Product
characteristics at such time as the same are available and
i-STAT's manufacturing specifications.
1.64 "Starting Date" shall mean January 1, 1999, unless an earlier
date is mutually agreed in writing by the Parties; provided,
however, the Starting Date shall not occur unless the Closing
has first occurred.
1.65 "Term" shall mean the period beginning on the Starting Date
and ending on December 31, 2003 or any extensions thereto,
unless otherwise terminated earlier in accordance with the
terms and conditions of Article 17.
1.66 "Territory" shall mean the Co-exclusive FUSO Territory, the HP
Territory (after the expiration the HP Exclusivity Period),
the Distributor Territories and the Exclusive Territory, which
collectively shall mean the entire world.
1.67 "Third Party" shall mean a natural person, corporation,
partnership, trust, joint venture, governmental authority or
other legal entity or organization other than the Parties
and/or their Affiliates.
1.68 "Third Party Agreements" shall mean all written or oral
agreements, contracts, purchase or sale orders and commitments
with Third Parties for the sale of i-STAT Product in the
United States.
1.69 "Trade" shall mean those potential customers for i-STAT
Product, including, without limitation, facilities operating
in the Field and group purchasing organizations.
1.70 "Trade Secrets" shall mean the technical or nontechnical data,
formulae, patterns, compilations, programs, devices, methods,
techniques, drawings, processes, financial data,
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financial plans, marketing plans, product plans and the like,
owned or licensed by a Party and/or its Affiliates: (a) from
which a Party and/or its Affiliates derives actual or
potential economic value by being held in secrecy and not
known by Third Parties who are not under an obligation of
confidentiality with respect thereto; or (b) which gives such
Party an advantage over Third Party competitors who do not
know or use it.
1.71 "Transition Period" shall mean the period of time between the
Signing Date and the Starting Date.
1.72 "United States" shall mean the fifty (50) states of the United
States, including its territories and possessions and the
District of Columbia and Puerto Rico.
1.73 "Warranty Period" shall have the meaning ascribed to it in
Section 14.1(b).
ARTICLE 2 - APPOINTMENT TO MARKET AND DISTRIBUTE
2.1 Exclusive Appointment. As of the Closing Date, i-STAT hereby
appoints Abbott and its Affiliates for the Term as i-STAT's
exclusive distributor of Products in the Exclusive Territory
for use in the Field and Abbott accepts such appointment. As
part of such appointment under this Section 2.1, Abbott shall
have the right to appoint sub-distributors in those countries
or territories in the Exclusive Territory in which ADD does
not then distribute products similar to Products. The Parties
acknowledge that, during the Term, either pursuant to
Section(s) 2.2, 2.3, 2.4 or otherwise, countries within the
Co-exclusive FUSO Territory, the HP Territory or the
Distributor Territory may no longer be subject to FUSO's, HP's
and i-STAT Distributors' distribution rights for i-STAT
Products, respectively. In such event, i-STAT shall notify
Abbott in writing at least thirty (30) days prior to the
expiration or termination of FUSO's, HP's, or any
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termination of such rights, such countries shall automatically
be deemed part of the Exclusive Territory. As exclusive
distributor hereunder, Abbott and its Affiliates shall have
the sole and exclusive right to market, promote, sell and
distribute Products in the Exclusive Territory for use in the
Field, which right shall operate to exclude all others,
including i-STAT, its Affiliates and all Third Parties;
provided, however, that i-STAT may maintain certain
consultative and technical staff, at i-STAT's expense, to
assist Abbott in connection with such marketing, promotion,
sales and distribution efforts, in accordance with Article 3.
In addition, i-STAT may continue to promote the concept and
benefit of point-of-care testing without violation of its
obligations hereunder.
2.2 Appointment in Co-exclusive FUSO Territory. As of the Closing
Date, i-STAT hereby appoints Abbott and its Affiliates as a
co-exclusive distributor of i-STAT Products with FUSO in the
Co-exclusive FUSO Territory for use in the Field from the
Starting Date until December 31, 2002. As part of such
appointment under this Section 2.2, i-STAT shall not appoint
any other Third Party as a distributor of Products in the
Co-exclusive FUSO Territory; provided, however, Abbott and its
Affiliates shall have the right to appoint sub-distributors in
those countries or territories in the Co-exclusive FUSO
Territory in which ADD does not then distribute products
similar to Products. ***
*** Confidential treatment requested
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***
2.3 Appointment in HP Territory. As of the expiration of the HP
Exclusivity Period (of which i-STAT shall provide written
notice to Abbott), i-STAT hereby appoints Abbott and its
Affiliates as a co-exclusive distributor of i-STAT Products
with HP in the HP Territory until such time as HP no longer
has any rights, on a country-by-country basis (of which i-STAT
shall provide written notice to Abbott), to distribute any
i-STAT Products under the HP Agreement, at which time Abbott
and its Affiliates shall become the exclusive distributor for
Products for such country ***
*** Confidential treatment requested
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***
2.4 Distributor Territories. ***
*** Confidential treatment requested
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***
2.5 Right of First Negotiation. i-STAT hereby grants to Abbott the
first right of negotiation with regard to any transaction
contemplated by i-STAT whereby i-STAT, directly or indirectly,
would license, sell, transfer, convey, assign to a Third Party
or otherwise encumber any right, title or interest of i-STAT
to sell, market, promote or distribute any i-STAT Product in
the consumer self-testing market (other than i-STAT's sales
directly to Third Parties in the usual and customary channel
of distribution of products to the retail consumer market). In
the event i-STAT determines to solicit a proposal for the
foregoing, i-STAT first shall promptly provide, exclusively to
Abbott written notice of such proposed solicitation, including
a detailed summary of all material terms and conditions. In
the event i-STAT receives an unsolicited Third Party proposal
with respect to such a transaction and i-STAT intends to
pursue negotiations with the Third Party submitting such
proposal, i-STAT shall promptly provide, exclusively to
Abbott, a detailed summary of the material terms and
conditions of such proposal. Abbott shall have thirty (30)
days from receipt of the solicitation or the unsolicited
Third Party proposal to advise i-STAT in writing (the
"Negotiation Notice") of whether Abbott shall negotiate with
i-STAT regarding the terms and
*** Confidential treatment requested
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conditions of the solicitation, or will "meet" such
unsolicited Third Party proposal, as the case may be. If
Xxxxxx elects to negotiate with i-STAT regarding the terms
and conditions of the solicitation, or to "meet" such
unsolicited Third Party proposal, as the case may be, Xxxxxx
and i-STAT shall negotiate exclusively in good faith, for not
less than sixty (60) days after Xxxxxx'x written election, a
definitive agreement reflecting the material terms of the
solicitation or proposal. If Xxxxxx and i-STAT are unable in
good faith to reach a definitive agreement within the sixty
(60) day period, i-STAT may enter into negotiations and
conclude a definitive agreement with a Third Party on terms
no less favorable to i-STAT than those finally offered
by or to Xxxxxx in all material respects.
2.6 Noncompetition. During the Term, so long as the Product is
materially meeting customer requirements, ADD shall not,
directly or indirectly, promote, market, distribute or sell a
directly competitive product in the Field in the Territory
which "functions the same" as the Products which ADD is
distributing. In the event Xxxxxx notifies i-STAT in writing
that a Product is not materially meeting customer
requirements, Xxxxxx shall afford i-STAT an opportunity to
conform Product to the necessary customer requirements within
a reasonable period of time. If i-STAT cannot or does not
conform such Product to the necessary customer requirements
within such reasonable period of time, then i-STAT promptly
shall notify Xxxxxx in writing of the continuation of such
nonconforming Product, and as of the date of such notice,
Xxxxxx shall no longer be subject to Xxxxxx'x obligation of
non-competition for such Product as set forth in this Section
2.6. For purposes of this Section 2.6, "functions the same"
shall mean the following:
***
*** Confidential treatment requested
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***
*** Confidential treatment requested
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***
2.7 Trade Costs. Xxxxxx and its Affiliates shall be responsible
for payment of all rebates, discounts, management fees,
service allowances, credits and taxes associated with the sale
by Xxxxxx or its Affiliates of Products.
2.8 Selling Price. Xxxxxx and its Affiliates shall, in their sole
discretion, determine the final sales price of Products sold
by Xxxxxx and its Affiliates to the Trade; provided, however,
that Xxxxxx shall consult with i-STAT at least once each
Calendar Quarter with respect to i-STAT's observations, ideas
and strategies regarding marketing the Products.
2.9 Contracting Rights. During the Term and subject to existing
rights of FUSO, HP, and i-STAT Distributors with respect to
i-STAT Products, Xxxxxx and its Affiliates shall have the
exclusive right to contract with the Trade for the sale of
Products in the Territory.
2.10 Assignment and Assumption of Customer Contracts. i-STAT shall
use reasonable commercial efforts to assign Customer Contracts
to Xxxxxx or its Affiliate, and Xxxxxx or its Affiliate shall
assume, effective as of the Starting Date, all of i-STAT's
rights and post-Starting Date obligations under the assigned
the Customer Contracts.
(a) i-STAT Liabilities. Notwithstanding the foregoing,
neither Xxxxxx nor its Affiliates are assuming (and
shall not be deemed to have assumed), without
limitation, any Liabilities of i-STAT, its Affiliates
or any Third Party prior to the Starting Date under
the Customer Contracts or any Third Party Agreements.
Without in any way
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limiting the generality of the foregoing, it is
expressly agreed that neither Xxxxxx nor its
Affiliates is assuming any of the following
Liabilities, whether civil or criminal:
(i) any Liability in any way arising out of
or resulting from i-STAT Products manufactured,
distributed or sold by i-STAT, its Affiliates or any
Third Party prior to the Starting Date, whether for
breach of any warranties, expressed or implied, or
any Liabilities to a Third Party, including any
Liabilities under any of the Third Party Agreements;
(ii) any Liabilities arising out of
withdrawals or recalls, rebates, trade or customer
promotional expenses, chargebacks or customer returns
of i-STAT Products manufactured, distributed or sold
by i-STAT, its Affiliates or any Third Party prior to
the Starting Date; or
(iii) any Liabilities for taxes or liens for
taxes or other governmental charges relating to the
Business.
Further, Xxxxxx shall not be liable and i-STAT shall defend,
indemnify and hold Xxxxxx and its Affiliates and their
officers, directors, employees and representatives harmless
from and against Liabilities resulting from or arising out of
the breach by i-STAT or any of its Affiliates of i-STAT's or
its Affiliates' obligations under Third Party Agreements prior
to the Starting Date.
(b) Xxxxxx Liabilities. i-STAT and its Affiliates shall
not be liable, and Xxxxxx shall defend, indemnify and
hold i-STAT and its Affiliates and their officers,
directors, employees and representatives harmless
from and against Liabilities resulting from or
arising out of the breach by Xxxxxx or any of its
Affiliates of Xxxxxx'x or any of
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its Affiliates' obligations under assigned Third
Party Agreements from and after the Starting Date.
2.11 Program Products. i-STAT has no rights to market, promote,
sell and/or distribute Program Products in the Field in the
Territory.
ARTICLE 3 - MARKETING AND PROMOTION
3.1 Cooperation. After the Closing Date, Xxxxxx and i-STAT shall
create a marketing council to facilitate communications and
assist Xxxxxx in its decision making, which council shall be
comprised of no less than three (3) and no more than five (5)
representatives from each of Xxxxxx'x and i-STAT's sales,
marketing and support organizations. At all times during the
Term, the number of Xxxxxx representatives to the marketing
council shall constitute a majority of the total number of
representatives on such council.
(a) Xxxxxx'x Responsibilities. Xxxxxx shall use its
reasonable commercial efforts to promote, market,
sell and distribute Products in the Territory. Such
efforts may include, but shall not be limited to, the
use of sales and marketing representatives who
dedicate greater than *** of their professional
efforts to the marketing, promotion and sale of
Products. Such efforts may also include, but shall
not be limited to, preparing collateral marketing
materials, conducting advertising, presenting
educational seminars, participating in customer
visitations, displaying exhibits at trade shows and
ensuring representation and attendance at industry
meetings, all of which shall be performed in
accordance with ADD's usual and customary practices.
Xxxxxx shall, on an on-going basis, and at Xxxxxx'x
cost, train and supervise the appropriate personnel
*** Confidential treatment requested
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within the ADD sales force (including the MediSense
sales force) in the promotion and sale of Products in
the Territory.
(b) i-STAT's Responsibilities. For the initial training,
i-STAT shall provide, at i-STAT's cost, training
personnel, in such scope, time and quantity as the
Parties may mutually agree, to train ADD's sales
force. i-STAT, at i-STAT's cost, also shall assist
Xxxxxx in the preparation of appropriate sales force
training materials. Further, i-STAT shall attend with
Xxxxxx, at i-STAT's expense, major trade shows in
1998 and 1999, as mutually agreed by the Parties, to
provide Xxxxxx with necessary technical and i-STAT
Product information support.
3.2 Development of Promotional and Marketing Materials. Promptly
after the Closing Date, i-STAT shall deliver to Xxxxxx copies
of all promotional and marketing materials owned or controlled
by i-STAT to be used by Xxxxxx and its Affiliates in the
promotion and sale of i-STAT Products hereunder. During the
Term, Xxxxxx shall develop and prepare, at Xxxxxx'x sole
discretion and at its cost, promotional and marketing
materials for use in its sale of Products. Prior to
publication, Xxxxxx shall submit all such materials to i-STAT
for verification of technical accuracy and conformity with
regulatory requirements and with i-STAT Trademark usage
guidelines. i-STAT shall provide such verification in writing
within fifteen (15) days of receipt of any such materials and
shall not unreasonably withhold its approval thereof.
3.3 Marketing Plans. Xxxxxx shall develop and prepare, at Xxxxxx'x
sole discretion and at its cost, all marketing plans for the
promotion and sale of Products; provided, however, Xxxxxx
shall provide to i-STAT for its review and comment only, prior
to implementation, any marketing plans developed by Xxxxxx
with respect to Products. i-STAT shall not disclose to any
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Third Party, including, without limitation, the i-STAT
Distributors, HP and FUSO, the existence of or any term or
concept contained within any such marketing plans. Xxxxxx
agrees that pricing programs for Products shall be independent
of pricing for other ADD products.
3.4 Sales Reports. Xxxxxx shall provide to i-STAT within thirty
(30) days after each Calendar Quarter, a sales report
reflecting the sales of Product in the Territory by Xxxxxx and
its Affiliates. Each such report shall provide Net Sales
dollars and unit sales of Products, listed separately by
component, for that Calendar Quarter, and for year-to-date.
These sales reports shall be considered Confidential
Information.
3.5 Product Support.
(a) Installation and Training in the United States.
During the Term, i-STAT shall install all Product
sold to the Trade in the United States and shall
provide such Trade with sufficient initial Product
training to enable such Trade to implement the
Product fully. This service shall not include the
installation of network communication hardware and a
software computer interface to the Trade's computer
systems, but shall include the installation and
training related to the i-STAT Central Data Station.
***
(b) Computer Interface Installation. During the Term, if
requested by Xxxxxx, i-STAT shall use its reasonable
commercial efforts to install network communications
hardware and computer interface software to customers
in the Trade in the United States.
*** Confidential treatment requested
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***
(c) Telephone Support. i-STAT shall provide telephone
support to customers in the Trade in the United
States, *** at a quality comparable to the quality of
service i-STAT provides as of the Closing Date.
(d) Product Support Charges. i-STAT shall invoice Xxxxxx
for non-Warranty Period support of Products at: ***
(e) International Support. With respect to the services
and support to be provided by i-STAT as described in
Section 3.5(a), Xxxxxx and its Affiliates shall
provide all such services and support in the
Territory outside of the United States and shall use
reasonable commercial efforts to ***
*** Confidential treatment requested
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To assist Xxxxxx in performing these service and support
activities, i-STAT shall provide Xxxxxx and its Affiliates
such training as may be mutually agreed in the technical
service and support of Products.
3.6 Product Samples. During the Term, i-STAT shall make reasonable
quantities as requested by Xxxxxx and its Affiliates (*** of
actual purchase orders placed by Xxxxxx and its Affiliates) of
Product samples available to Xxxxxx, at *** to be used by
Xxxxxx and its Affiliates and sub-distributors to demonstrate
and sample the Products to the Trade in the Territory, except
to those countries subject to HP's exclusive rights for i-STAT
Products, but only for so long as such rights remain
exclusive. During the Term, i-STAT shall provide as available,
outdated and rejected Product as requested by Xxxxxx at no
charge. i-STAT shall add to each label of such outdated and
rejected Product the following: "Not For Resale".
ARTICLE 4 - MANUFACTURE AND SUPPLY OF PRODUCT
4.1 Manufacture.
(a) Product Supply. Upon the terms and subject to the
conditions of this Agreement, i-STAT shall
manufacture, or cause to be manufactured, and provide
to Xxxxxx such quantities of Products as are
consistent with the forecasting and ordering
provisions set forth in Section 4.2.
(b) Product Labeling and Package Inserts. i-STAT, at its
expense, shall translate and modify each Product's
documentation and labeling and all Analyzer and
certain Ancillary Products, such as central data
station screens and displays, into Spanish,
*** Confidential treatment requested
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Italian, French, Dutch, German and Swedish and Xxxxxx
shall be responsible for translation into any other
language so that such Products comply with all local
requirements for sale and clinical use in each
country or region of the Territory. Each Party shall
assist the other Party with such translation at such
other Party's request. Further, subject to the
requirements of applicable law, i-STAT shall include
on all Products a co-branded label identifying Xxxxxx
and i-STAT with equal prominence.
(c) Product Registrations. i-STAT owns, holds and has all
right, title and interest in and to all registrations
with respect to i-STAT Products, and shall provide,
at i-STAT's sole expense, such authorizations
thereunder to Xxxxxx as may be required to permit
Xxxxxx to distribute the i-STAT Products. If for any
reason, Xxxxxx must obtain additional consents or
authorizations to obtain marketing rights for the
Products in a particular Designated Country, Xxxxxx
shall advise i-STAT in writing and the Parties shall
work together to obtain all such necessary consents
and authorizations, at i-STAT's expense.
(d) Product Changes. i-STAT shall notify Xxxxxx in
writing of any proposed changes in i-STAT's
manufacturing process which affect fit, form or
function of Product. Upon the request of Xxxxxx,
i-STAT shall provide to Xxxxxx representative samples
of such changed Product in sufficient quantities.
Upon such notice of any proposed change, and after
receipt of such representative samples, Xxxxxx may
evaluate and communicate to i-STAT its approval or
disapproval of such change within thirty (30) days
after the date of notice; provided, however, that
Xxxxxx shall not unreasonably withhold its approval
of any such change. Only upon notice of written
approval from Xxxxxx may
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i-STAT incorporate such change into the manufacturing
process. i-STAT shall be obligated only to notify
Xxxxxx in writing of any proposed significant changes
in i-STAT's manufacturing process which do not affect
fit, form or function of Product (which may, but not
necessarily include changes to written quality plans,
changes that affect written quality plans for
production or written quality procedures respecting
the same, as well as, changes outside the validated
level or procedure, in manufacturing procedures,
component part or raw materials vendors,
manufacturing sites or chip shrink and wafer
dimension changes, and Xxxxxx shall have no right of
approval with respect to any such changes.
(e) Certified Vendor. Each Party shall use its reasonable
commercial efforts to enable i-STAT to become an
Xxxxxx certified vendor within three (3) months after
the Closing Date by satisfying the quality
requirements and standards as previously delivered to
i-STAT.
(f) Special Provisions. i-STAT shall maintain stock of
items critical to the manufacture of Products in
accordance with its standard operating procedure for
ordering special materials reflected in SOP-2002, as
may be revised from time to time, and which is
incorporated herein by reference. i-STAT shall
provide Xxxxxx notice of any change to SOP-2002
reasonably likely to affect the production of
Products.
(g) Fully Burdened Manufacturing Costs Report. i-STAT
shall provide to Xxxxxx a written report within
thirty (30) days after each Calendar Quarter
reflecting a detailed analysis of the Fully Burdened
Manufacturing Costs for the preceding Calendar
Quarter for Products purchased on a cost or cost-plus
basis. Further, i-STAT shall advise
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Xxxxxx in writing sufficiently in advance of any
proposed change in i-STAT's accounting methodology
and treatment so that Xxxxxx can adjust its
record-keeping accordingly to integrate such change.
4.2 Forecasting. Within thirty (30) days after the Signing Date,
the Parties shall agree in writing to a forecasting
methodology which, given best reasonable efforts, assures an
uninterrupted supply of Product to the Trade. The components
of the forecasting methodology will include:
(a) Short-term forecasts which ensure proper planning of
manufacturing production to meet demand. Purchase
orders from Xxxxxx to i-STAT should be, within a
mutually acceptable range, consistent with this
forecast;
(b) Long-term forecasts which aid i-STAT in capacity
planning and ensure optimal investments in
manufacturing expansions;
(c) The forecasts shall be developed taking into account
lead time requirements necessary to ramp up
production as well as assuring proper supply of long
lead time materials; and
(d) A mechanism for sharing of expenses associated with
under utilization of capacity and long lead time
materials.
4.3 Failure to Supply. In the event i-STAT does not supply
conforming Products that were ordered in compliance with the
forecasting process to be established in accordance with
Section 4.2, the growth levels necessary to avoid the growth
deficiency described in Section 17.3 shall be reduced by the
quantity of Product not so delivered. In the event i-STAT is
unable to supply Product in accordance with Xxxxxx'x and its
Affiliates' firm purchase orders as a result of
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nonconforming Product or an event of force majeure, the growth
levels necessary to avoid the growth deficiency described in
Section 17.3 shall be reduced by the quantity of Product not
supplied.
4.4 Supply Allocation. In the event of a shortage of i-STAT
Product during the portion of the Term in which Xxxxxx is a
co-exclusive distributor of i-STAT Product, i-STAT shall
allocate i-STAT Product in a reasonable manner so as to
support Xxxxxx and its Affiliates as a supplier of i-STAT
Products, and at a minimum, i-STAT shall allocate its
manufacturing capability on a unit basis so that Xxxxxx and
its Affiliates receive the same percentage of i-STAT's total
output of i-STAT Products as Xxxxxx and its Affiliates
received on average during the most recent six (6) months
prior to the shortage.
4.5 Ordering Processing. Except with respect to rights of HP, FUSO
and the i-STAT Distributors to the i-STAT Products, Xxxxxx and
its Affiliates shall be responsible for solicitation and for
receiving and processing orders for Product from the Trade in
the Territory. Purchase orders for Products received by i-STAT
from the Trade in the Exclusive Territory or from Third
Parties under contract with Xxxxxx or its Affiliates in the
Distributor Territory, the Co-exclusive FUSO Territory and the
HP Territory shall be transferred immediately to Xxxxxx for
handling and invoicing. i-STAT may receive and process orders
for Products on behalf of Xxxxxx as mutually agreed from time
to time.
ARTICLE 5 - PRICE AND TERMS
5.1 Purchase Price for Analyzers and Ancillary Products. The
Purchase Price for Analyzers and Ancillary Products shall be
***
*** Confidential treatment requested
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*** except that the Purchase Price for those certain Ancillary
Products that i-STAT purchases from Third Parties as described
in Schedule 1.6 (under "Distributed Products") shall be ***.
During the Term, Xxxxxx and its Affiliates may, at their
discretion, source directly all Ancillary Products purchased
by i-STAT from a Third Party; provided that such Ancillary
Products conform to the Specifications. Prior to contracting
directly for such Ancillary Products, Xxxxxx and its
Affiliates shall advise i-STAT in writing and the Parties
shall coordinate a reasonable transition period in which to
enable i-STAT to reduce any inventory of such Ancillary
Products ordered by i-STAT as a result of a firm purchase
order for such Ancillary Products placed by Xxxxxx or its
Affiliates.
5.2 Estimated Cartridge Purchase Price. Except for the first
Contract Year, wherein the Estimated Cartridge Purchase Price
shall be ***, the Parties shall determine the Estimated
Cartridge Purchase Price to be used for all purchases of
Cartridges by Xxxxxx and its Affiliates for each subsequent
Contract Year on or before *** of the then current Contract
Year. The Estimated Cartridge Purchase Price shall be
determined by assigning a single Estimated Cartridge Purchase
Price, by product code, to be charged in such subsequent
Contract Year based on the projected number of Cartridges
Xxxxxx and its Affiliates shall buy from i-STAT in such
subsequent Contract Year contained in Xxxxxx'x annual forecast
provided to i-STAT in accordance with the methodologies to be
mutually agreed to by the Parties under Section 4.2. The
calculation to derive this single Estimated Cartridge Purchase
Price is as follows: ***
*** Confidential treatment requested
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***. The Estimated Cartridge Purchase Price for each Contract
Year is subject to adjustments pursuant to Sections 5.3 and
5.4. (See the example in Schedule 5.2.)
5.3 Year-End Reconciliation. Within fifteen (15) days after the
end of each Contract Year, Xxxxxx and i-STAT shall reconcile,
by product code, the Actual Cartridge Purchase Price for the
just completed Contract Year against the actual number of
Cartridges purchased by Xxxxxx and its Affiliates hereunder as
reflected in the sales reports provided i-STAT pursuant to
Section 3.4. This reconciliation shall be performed to, among
other reasons, ***. The calculations and results of such
reconciliation shall be contained in a written report
submitted to i-STAT within fifteen (15) days after the end of
the just completed Contract Year. i-STAT shall make any
adjustments as to overpayments or underpayments, if any, by
credit or debit memo, as the case may be, within fifteen (15)
days after i-STAT's receipt of the report; provided, however,
any such adjustment in the final Contract Year shall be
handled by a check or wire transfer of the overpayment or
underpayment to the affected Party within thirty (30) days
after the end of the final reconciliation. (See example in
Schedule 5.3)
5.4 Calendar Quarter Reconciliations. Within fifteen (15) days
after the end of each Calendar Quarter, Xxxxxx and i-STAT
shall reconcile, by product code, *** for the just completed
Calendar Quarter against the ***
*** Confidential treatment requested
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***. In addition, i-STAT shall report to Xxxxxx pursuant to Section
4.1(g) *** during the just completed Calendar Quarter. ***
The calculations and results of such reconciliation shall be contained
in a written report submitted to i-STAT within fifteen (15) days after
the end of the just completed Calendar Quarter. i-STAT shall make any
adjustments as to overpayments or underpayments, if any, by credit or
debit memo, as the case may be, within fifteen (15) days after i-STAT's
receipt of the report, provided, however, any such adjustment in the
final Calendar Quarter shall be handled by a check
*** Confidential treatment requested
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or wire transfer of the overpayment or underpayment to the
affected Party within thirty (30) days after the end of the
final reconciliation. (See example in Schedule 5.4)
5.5 Prepayments. Subject to Xxxxxx'x satisfaction, at its sole
discretion, that the conditions to Closing described in
Article 8 have been met, or have been waived by Xxxxxx, Xxxxxx
shall prepay to i-STAT a total of Twenty-Five Million Dollars
(US$25,000,000) during the first three (3) Contract Years on
the terms and conditions described below in this Section 5.5.
The Prepayments shall constitute future gross margin to i-STAT
on the sale of Cartridges to Xxxxxx and its Affiliates and
shall be repaid to Xxxxxx by i-STAT as a credit against actual
purchases of Incremental Units *** as part of the Calendar
Quarter reconciliation described in Section 5.4. The
Prepayments shall be made in accordance with the schedule set
forth in Schedule 5.5. ***
*** Confidential treatment requested
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5.6 Minimum Cartridge Purchase Price. Notwithstanding anything in
this Article 5 or any other section of this Agreement to the
contrary, during the Term, the Estimated Cartridge Purchase
Price and the Actual Cartridge Purchase Price shall be no less
than the Minimum Cartridge Purchase Price as set forth in
Schedule 1.53. The Parties shall evaluate the calculation of
the Minimum Cartridge Purchase Price ***, if requested by
either Party, and shall adjust such Minimum Cartridge Purchase
Price, if at all, taking into consideration, but without
limitation, ***.
5.7 Program Product Pricing. Prior to a Program Product launch,
the Parties shall negotiate the purchase price Xxxxxx and its
Affiliates shall pay i-STAT for such Program Product. In
determining such purchase price, the Parties shall consider
such factors as ***. If the Parties are not able to mutually
agree to a purchase price for such Program Product, the
purchase price for such Program Product shall be ***. The
purchase price of any Program Product shall be subject to ***.
5.8 Payment Terms. Each Party shall invoice the other Party or its
Affiliates, as the case may be, for Products purchased and
services provided hereunder, as appropriate. Each Party shall
pay such invoices in United States dollars net thirty (30)
days from the date of receipt of the invoice. In the event
either Party fails to make a payment when due, overdue
payments shall bear
*** Confidential treatment requested
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interest at the rate of one and one-half percent (1.5%) per
month, or if lower, the highest rate permitted by law, from
the date due until paid.
ARTICLE 6 - SHIPMENT AND DELIVERY
6.1 Shipment. Delivery shall occur for Products shipped to
Designated Countries *** for Products shipped in the United
States. ("Delivery" or "Delivered"). Unless otherwise agreed,
freight charges for Products Delivered to the United States
will be *** in its sole discretion. With regard to shipments
of Products to Designated Countries, i-STAT shall ***. i-STAT
may make partial shipments of the Products, subject to prompt
filling of any resulting backorder.
6.2 Delivery in the United States. For Delivery of Products in the
United States, i-STAT shall ship Products sold by Xxxxxx and
its Affiliates in accordance with shipping instructions
provided by Xxxxxx. At Xxxxxx'x request (including pursuant to
shipping instructions provided on purchase orders submitted by
Xxxxxx), i-STAT shall ship Products directly to the Trade in
the United States.
6.3 Export Licenses; Import Certificates; Customs and Regulatory
Approval for Delivery of Products Outside the United States.
(a) i-STAT's Duties. i-STAT, at its cost, shall: ***
*** Confidential treatment requested
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*** and take all reasonable steps to cooperate with
Xxxxxx in complying with any import, export or custom
regulations applicable to the Products, to the extent
consistent with applicable law, including filling out
necessary paperwork or reports to obtain any
applicable waiver, exemption or reduction of such
duties in a timely manner.
(b) Xxxxxx'x Duties. Xxxxxx shall: ***.
(c) To the extent Xxxxxx or its Affiliates cannot, ***.
6.4 Title and Risk of Loss. Title to and risk of loss of Products
shall pass to Xxxxxx at the time of Delivery. Any loss or
damage to Products prior to Delivery shall be at i-STAT's
risk.
*** Confidential treatment requested
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6.5 Taxes. Subject to Section 6.3(c), any foreign, federal, state,
county or local sales, use, value-added or excise tax or
similar charge, including customs and import duties, or other
tax assessment (other than that assessed against income),
license fee (other than royalties owed to Third Parties) or
other charge lawfully assessed or charged on the sale or
transportation of Products sold pursuant to this Agreement
after Delivery to Xxxxxx shall be paid by Xxxxxx.
6.6 Certificate of Analysis. i-STAT shall provide Xxxxxx with a
Certificate of Analysis with each batch of Cartridges sold to
Xxxxxx hereunder certifying compliance with the
Specifications. Full batch documentation, including batch
production records, and manufacturing and analytical records
shall be available for review by Xxxxxx on site at i-STAT upon
reasonable notice from Xxxxxx.
ARTICLE 7 - ACCEPTANCE OF PRODUCT;
INSPECTION OF MANUFACTURING FACILITY
7.1 i-STAT Testing. i-STAT shall inspect and test Products for
conformity to the Specifications in accordance with its normal
quality assurance procedures as such procedures may be amended
from time to time prior to release to Xxxxxx and its
Affiliates or to the Trade in the United States. i-STAT shall
notify Xxxxxx prior to any change in its quality assurance
procedures that reasonably may be expected to affect the
quality of the Product.
7.2 Xxxxxx Testing. Until such time as i-STAT becomes an Xxxxxx
certified vendor pursuant to Section 4.1(e), acceptance of all
Product shall be subject to Xxxxxx'x or its Affiliates'
inspection and approval. Xxxxxx or its Affiliates shall,
within ten (10) days after receipt of the representative
sample of Products, inspect and test such sample and may
reject any representative sample of Products which is:
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(a) not in compliance with the Specifications;
(b) not in compliance with all manufacturing procedures,
in-process controls, testing, specifications and
storage conditions, as set forth in i-STAT's 510(k),
or any foreign equivalent for Product, or any
subsequent amendments thereto;
(c) not manufactured in accordance with cGMPs;
(d) not conforming to instructions agreed upon by the
Parties in writing regarding packaging or transport;
(e) shipped in violation of any applicable statute,
administrative order or regulation;
(f) recalled by any governmental agency or by i-STAT for
reasons for which Xxxxxx and its Affiliates are not
at fault; or
(g) shipped by i-STAT with less than *** dating for
United States sales or *** dating for non-United
States sales with respect to Cartridges and Ancillary
Products having an expiration date.
If Xxxxxx, or its Affiliates, as the case may be, reject any Product,
it shall give i-STAT written notice of such rejection within the ten (10) day
testing period, accompanied by a written summary of the grounds for rejection
and any testing performed by Xxxxxx, or its Affiliates, as the case may be. Upon
receipt of such notice, i-STAT may request Xxxxxx, or its Affiliates, as the
case may be, to return the rejected Product, or samples thereof, for testing by
i-STAT. Xxxxxx'x or its Affiliates' rejection shall be final unless i-STAT
notifies Xxxxxx within thirty (30) days after the later of the receipt of the
rejection notice or the rejected Product, or samples thereof, that i-STAT
disagrees with Xxxxxx'x or its Affiliates' conclusions with respect to the
rejected Product.
*** Confidential treatment requested
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If the Parties are unable to resolve the dispute, samples of the rejected
Product shall be submitted to a mutually acceptable independent testing
laboratory for analysis. The results of the independent testing laboratory shall
be final and binding on the Parties. The costs of the independent testing
laboratory shall be paid by the Party against whom the discrepancy is resolved.
The Parties' inability to agree upon an independent testing laboratory shall be
resolved through the dispute resolution procedures set forth in Section 21.6.
All i-STAT Product properly rejected by Xxxxxx or its Affiliates pursuant to the
terms and conditions of this Section 7.2 and not otherwise replaced by i-STAT in
a timely fashion to enable Xxxxxx and its Affiliates to consummate the available
sale to the Trade shall be included in any calculation with respect to credits
against Prepayments as described in Section 5.5, growth deficiencies as
described in Section 17.3, *** and any other provision hereunder where the
quantity of Xxxxxx'x purchases of i-STAT Product or Net Sales is a factor.
7.3 Xxxxxx Inspection. i-STAT shall permit Xxxxxx, upon reasonable
notice and during regular business hours, but no more often
than once in each Contract Year, access to those areas of
i-STAT's manufacturing facilities where the Products are
manufactured, tested, packaged, stored, handled and shipped to
verify i-STAT's compliance with its obligations hereunder.
ARTICLE 8 - CONDITIONS TO CLOSING
8.1 Closing. The Closing shall be held at the time and place
specified in Section 1.2 of the Stock Purchase Agreement at
the offices of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 399 Park
*** Confidential treatment requested
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Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m., as soon as
practicable, but in any event no later than the fifth Business
Day following the satisfaction or waiver of the conditions set
forth in this Article 8, or at such other time and place upon
which i-STAT and Xxxxxx shall mutually agree.
8.2 General Conditions. The obligations of Xxxxxx and i-STAT to
effect the Closing shall be subject to the satisfaction at or
prior to the Closing of the following conditions:
(a) No order, statute, rule, regulation, executive order,
injunction, stay, decree or restraining order shall
have been enacted, entered, promulgated or enforced
by any court of competent jurisdiction or
governmental or regulatory authority or
instrumentality that prohibits the execution,
delivery or performance of any of the Alliance
Agreements, and no proceeding by any governmental or
regulatory authority or instrumentality shall be
pending or threatened, which seeks to prohibit or
declare illegal the execution, delivery or
performance of any of the Alliance Agreement;
(b) All filings under the HSR Act and other laws of any
jurisdiction applicable to the transactions
contemplated in the Alliance Agreements shall have
been made and any required waiting period under such
laws shall have expired or been earlier terminated;
and
(c) The "Closing" as such term is defined in the Stock
Purchase Agreement shall have occurred or shall be
occurring simultaneously.
8.3 Conditions to Obligations of Xxxxxx. The obligations of Xxxxxx
to effect the Closing shall be further subject to the
satisfaction at or prior to the Closing of the following
conditions:
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(a) All corporate and other proceedings taken or to be
taken in connection with the transactions
contemplated in the Alliance Agreements, and all
documents incident thereto, shall be reasonably
satisfactory in form and substance to Xxxxxx and
Xxxxxx'x counsel. Without limiting in any way the
generality of the foregoing, i-STAT shall have duly
received all authorizations, waivers, consents,
approvals, licenses, franchises and permits by or of
all persons necessary or advisable, in the reasonable
opinion of Xxxxxx and Xxxxxx'x counsel, for the
execution, delivery and performance by i-STAT of its
obligations under the Alliance Agreements;
(b) The representations and warranties of i-STAT
contained herein and in the other Alliance Agreements
shall be true and correct at and as of the Signing
Date and at and as of the Closing Date as though
restated on and as of the Closing Date (except in the
case of any representation and warranty that by its
terms is made as of a date specified therein, in
which case such representation and warranty shall be
true and correct as of such date);
(c) Xxxxxx shall have received from i-STAT's counsel,
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, an opinion
addressed to Xxxxxx substantially in the form of
Schedule 8.3, dated the Closing Date; and
(d) Xxxxxx shall have received from i-STAT a certificate
signed by an appropriate officer as to i-STAT's
compliance with the conditions set forth in clauses
(a) and (b) of this Section 8.3.
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8.4 Conditions to Obligations of i-STAT. The obligations of i-STAT
to effect the Closing shall be further subject to the
satisfaction at or prior to the Closing of the following
condition:
(a) All corporate and other proceedings taken or to be
taken in connection with the transactions
contemplated in the Alliance Agreements, and all
documents incident thereto, shall be reasonably
satisfactory in form and substance to i-STAT and
i-STAT's counsel. Without limiting in any way the
generality of the foregoing, Xxxxxx shall have duly
received all authorizations, waivers, consents,
approvals, licenses, franchises and permits by or of
all persons necessary or advisable, in the reasonable
opinion of i-STAT and i-STAT's counsel, for the
execution, delivery and performance by i-STAT of its
obligations under the Alliance Agreements.
8.5 Non-Fulfillment of Conditions. The non-fulfillment of any of
the conditions described in Sections 8.2, 8.3 or 8.4 (whether
or not the Closing occurs) shall not result in any liability
to any Party unless such non-fulfillment is a result of a
breach of this Agreement or any of the other Alliance
Agreements by such Party.
8.6 Condition Subsequent. Within 30 days after the Closing Date
but not later than the Starting Date, i-STAT shall use its
reasonable commercial efforts to assign the Customer Contracts
to Xxxxxx as provided in Section 2.10, together with any
required consents under such of the Customer Contracts
permitting such assignment.
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ARTICLE 9 - REGULATORY COMPLIANCE AND MEDICAL COMPLAINTS
9.1 No Modification to Product. Xxxxxx shall not modify,
repackage, reformulate or alter any Product, including its
label, except with specific written authorization from i-STAT.
9.2 Regulatory Compliance. i-STAT shall be responsible for all
governmental and regulatory filings in the Territory for
Products. All responses to governmental agencies concerning
the Products shall be the sole responsibility of i-STAT, with
reasonable assistance from Xxxxxx, at i-STAT's expense, as
requested by i-STAT. i-STAT shall provide Xxxxxx copies of all
filings and/or responses concerning the Products which occur
after the Closing Date. In the event i-STAT is unable to
obtain or maintain the requisite governmental approvals to
enable Xxxxxx and its Affiliates to sell Products in any such
country in the Territory, Xxxxxx'x inability to meet the
purchase or sales targets described in Sections 2.2 (a), 5.5,
and 17.3, and any other provision hereunder where the quantity
of Xxxxxx'x purchases of Products or Net Sales is a factor
shall be adjusted based on the most recent six (6) month sales
of the affected Product in such country, multiplied by two (2)
and adjusted for the period that such Product is off the
market, to reflect the adverse impact to Xxxxxx due to the
absence of regulatory clearance.
9.3 Customer Complaints. In the event Xxxxxx or its Affiliates
receives a customer complaint regarding Products, Xxxxxx shall
evaluate the complaint and promptly notify i-STAT in writing
regarding such complaint. If Xxxxxx determines that the
complaint is due to a matter that is within i-STAT's
responsibilities hereunder, then i-STAT, at Xxxxxx'x request
and at i-STAT's expense, shall assist Xxxxxx or its Affiliates
in follow-up correction of such complaints. Subject to the
provisions of any nondisclosure agreements by which the
Parties are bound, the Parties shall exchange on a
confidential basis all pertinent information regarding a
customer complaint
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with respect to i-STAT Products sold in the Co-exclusive FUSO
Territory, the HP Territory and the Distributor Territories,
or if the complaint involves a problem common to Xxxxxx and
FUSO, HP and/or the i-STAT Distributors.
ARTICLE 10 - PRODUCT RECALL OR WITHDRAWAL
10.1 Event of Recall and Withdrawal. In the event: (a) any
governmental or regulatory authority in the Territory issues a
request, directive or order that Product be recalled or
withdrawn, or such request, directive or order is imminent;
(b) a court of competent jurisdiction orders such recall or
withdrawal; or (c) either Party reasonably determines after
consultation with the other that a recall or withdrawal is
necessary or advisable (each a "Recall"), the Parties shall
take all appropriate corrective action.
10.2 Expense of Recall. In the event a Recall results from any
cause or event arising from the manufacture, packaging,
shipment of Products by i-STAT and its Affiliates, or the
marketing, promotion, sale or distribution of Products by a
Third Party (excluding Third Parties in privity with Xxxxxx),
or other cause or event attributable to i-STAT, its Affiliates
or Third Parties (excluding Third Parties in privity with
Xxxxxx), i-STAT shall be responsible for the expense of the
Recall. In the event a Recall results from any cause or event
attributable to Xxxxxx, its Affiliates or distributors and
arising from the marketing, promotion, sale or distribution of
Products by Xxxxxx, its Affiliates or distributors, or other
cause or event attributable to Xxxxxx, its Affiliates or
distributors, Xxxxxx shall be responsible for the expense of
the Recall. In each instance, the Parties shall cooperate to
effectuate efficiently the Recall. For purposes of this
Agreement, Recall expenses shall include, without limitation,
the expenses of
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notification and destruction or return of the recalled or
withdrawn Product and Xxxxxx'x, its Affiliates' or
sub-distributors' costs for the Products recalled or
withdrawn.
ARTICLE 11 - TRANSITION PERIOD
11.1 Conduct During Transition Period. During the Transition
Period, except as otherwise provided for in this Agreement or
as Xxxxxx shall otherwise consent (which consent shall not be
unreasonably withheld), i-STAT covenants and agrees that, with
respect to the Business, i-STAT shall:
(a) not enter into any transaction that would reasonably
be expected to affect the Business adversely;
(b) not amend any Third Party Agreements in any respect
that would affect adversely i-STAT's rights
thereunder, or terminate any of the Third Party
Agreements, other than in accordance with the terms
of such agreements for breach, or default in the
performance of any covenant or obligation thereunder
which default is not cured within any applicable
grace period;
(c) continue its pricing and sales practices
substantially in accordance with i-STAT's past
practices, and in accordance therewith, not offer any
financial terms or incentives to any customers to
purchase i-STAT Products more favorable than the
average cash discount or payment terms as offered by
i-STAT between January 1, 1998 through June 30, 1998;
(d) not enter into any contract providing for any
license, sale, assignment or otherwise transfer any
rights or grant any covenant not to xxx with respect
to any i-STAT
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Know-How and Technology (as that term is defined in
Section 1.34 of the Funded Research & Development and
License Agreement) which would have a material
adverse impact on the Business;
(e) continue the customer service hotline and order entry
function with respect to the Business at the same
level of service as provided by i-STAT between
January 1, 1998 through June 30, 1998; and
(f) other than in the ordinary course of business, not
enter into any agreement with any Third Party for the
sale or resale of i-STAT Products or offer any
rebates or other agreements related to i-STAT
Products, unless i-STAT first obtains Xxxxxx'x prior
written consent. If Xxxxxx grants such consent, then
such agreement shall be added as a Third Party
Agreement.
11.2 Customer Transition Matters. In accordance with the following
dates, except as otherwise contemplated by this Agreement or
as Xxxxxx shall otherwise agree in writing in advance with
respect to the Business, in order effectively to maintain and
transition the Base Customers from i-STAT to Xxxxxx or its
Affiliates, i-STAT and Xxxxxx each covenant and agree that as
appropriate each shall or shall cause its Affiliates to:
(a) no later than thirty (30) days after the Starting
Date, and for a period of an additional thirty (30)
days, i-STAT shall participate in joint sales calls
with Xxxxxx or its Affiliates, at the discretion of
Xxxxxx, to introduce Xxxxxx'x or its Affiliates'
sales representatives to i-STAT's customers;
(b) prior to the Starting Date, i-STAT shall, with
Xxxxxx, participate in planning for the effective
transition of the Base Customers to Xxxxxx or its
Affiliates;
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(c) no later than fifteen (15) days after the Signing
Date, i-STAT and Xxxxxx shall have an initial meeting
and shall continue to meet thereafter until the
Starting Date, as necessary, to integrate or
transition to Xxxxxx or its Affiliates i-STAT's order
entry system, customer and contract numbers, pricing,
i-STAT Product list numbers and the like;
(d) prior to the Starting Date, i-STAT and Xxxxxx shall
meet to determine the Parties' ability to and need
for an integration of systems and any concerns
regarding Year 2000 Compliant (as hereinafter
defined) issues associated with any such integration;
and
(e) prior to the Starting Date, i-STAT and Xxxxxx shall
mutually agree to perform any other transition
activity deemed appropriate.
ARTICLE 12 - BOOKS AND RECORDS
12.1 Xxxxxx and i-STAT each shall maintain proper books and records
in accordance with generally accepted accounting principles
reflecting Net Sales, Base AUP, AUP, Incremental AUP,
Estimated Cartridge Purchase Price, Actual Cartridge Purchase
Price, Purchase Price, Base Fully Burdened Manufacturing Costs
and Fully Burdened Manufacturing Costs calculations, as
appropriate. Upon thirty (30) days' prior written notice to
the audited Party (but not more frequently than once in any
Contract Year, unless there is a dispute, then as frequently
as is necessary), the requesting Party may retain, at its own
expense, an independent certified public accountant reasonably
acceptable to the audited Party to examine the audited Party's
books and records relating to the matters described herein,
which shall be transferred to, if not already at, the audited
Party's principal place of business. Such examination shall
occur at the audited Party's
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principal place of business during normal business hours for
the sole purpose of verifying the accuracy of such
calculations. Such accountant shall be required to execute a
mutually acceptable confidentiality agreement and shall report
to the requesting Party only the amount of any discrepancy in
the calculations. Within thirty (30) days after completion of
such examination, the Parties shall reconcile any underpayment
or overcharge, if any, by credit or debit memo; provided,
however, if such adjustment is to occur at the end of the
final Contract Year, any overpayment or underpayment shall be
paid by check or wire transfer to the affected Party within
thirty (30) days after the end of the final reconciliation.
Such examination rights may be exercised by the Parties only
with respect to records for the then current Contract Year and
the then prior Contract Year.
ARTICLE 13 - PATENTS AND TRADEMARKS
13.1 Trademark License. i-STAT hereby grants to Xxxxxx and its
Affiliates a non-exclusive license, with the right to
sublicense, to use the i-STAT Trademarks in the Field with
respect to i-STAT Products, and in the Program Field (as that
term is defined in the Funded Research & Development and
License Agreement) with respect to Program Products, to
market, promote, distribute and sell Products in the
Territory. On or before January 1 of each Contract Year,
i-STAT shall provide Xxxxxx with a Trademark report reflecting
all applications for Trademarks and the status thereof. In
addition, i-STAT shall, at its expense, file new applications
to register any or all of the i-STAT Trademarks in any or all
of the countries in the Territory, as may be reasonably
requested by Xxxxxx. Xxxxxx shall give i-STAT at least ninety
(90) days' prior written notice before marketing, promoting,
selling or distributing any Product under the i-STAT
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Trademarks in any country not identified in the i-STAT
Trademark report. The Parties shall mutually agree on the
trademark approach in any such country, taking into
consideration, among other things, the length of time required
to obtain trademark registration, laws relating to trademark
use, the existence of any conflicting trademark registrations,
applications or uses and the anticipated sales volumes of the
relevant Products in such country. Any use of an Xxxxxx
trademark by i-STAT shall be subject to Xxxxxx'x prior
approval, which approval may be withheld by Xxxxxx at Xxxxxx'x
sole discretion.
13.2 Trademark Ownership. It is understood and agreed that i-STAT,
is the sole and exclusive owner of all rights, title and
interests in and to the i-STAT Trademarks. Nothing contained
in this Agreement shall be construed as an assignment to
Xxxxxx of any rights, title or interests in the i-STAT
Trademarks; it being understood that all rights, title and
interests relating to the i-STAT Trademarks are expressly
reserved by i-STAT, except for the rights being licensed
hereunder.
13.3 Infringement. Each Party shall notify the other Party of any
suspected infringements by Third Parties of the i-STAT
Trademarks in the Field or any patent or other proprietary
right of i-STAT in the Field that may come to such Party's
attention. i-STAT shall have the initial right to determine
whether any action shall be taken on account of any such
infringement, and i-STAT shall have the right to employ
counsel of its choosing and to direct the handling of the
litigation and any settlements thereof, at such i-STAT own
expense. In the event i-STAT does not pursue such potential
infringement within three (3) months after notice of such
potential infringement, Xxxxxx shall have the right to take
action on its own behalf, to employ counsel of its choosing
and to direct the handling of the litigation and any
settlements thereof, at
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Xxxxxx'x own expense. The Parties agree to cooperate with each
other in maintaining, protecting and defending the Trademarks.
13.4 Possible Removal From Market. Except as provided in Section
13.5, in the event that the manufacture, use, sale or
importation for sale of Product becomes, or, in the opinion of
i-STAT and confirmed by Xxxxxx, may become, the subject of any
claim, suit or proceeding for infringement or if the
manufacture, use, sale or importation for sale of the Product
is or is likely to be enjoined for infringement, i-STAT shall,
at its option and expense, do one (1) or more of the
following:
(a) obtain for Xxxxxx, its Affiliates and
sub-distributors the right to use, sell and import
for sale the Product;
(b) modify the Product so that it becomes non-infringing
or replace the Product with a non-infringing product
while remaining in compliance with i-STAT's published
Specifications in effect at the time; or
(c) require that Xxxxxx, its Affiliates and
sub-distributors cease to deliver the Product in the
affected country.
In the event i-STAT does not perform (a) or (b) above, and such
nonperformance reduces Xxxxxx'x annual Net Sales for Products *** Xxxxxx either
may adjust the calculations of its purchase of Product and Net Sales under
Sections 2.2, 5.5 and 17.3, and any other provision hereunder where the quantity
of Xxxxxx'x purchases of Product or Net Sales is a factor, by the quantity of
Product affected by such nonperformance, or terminate this Agreement.
13.5 Third Party Claims for Infringement.
*** Confidential treatment requested
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(a) If a Third Party brings a legal action or
administrative proceeding against either or both of
the Parties alleging infringement by Product in the
Field in the Territory, the Parties agree that they
shall confer in good faith to determine the most
effective means of cooperating to defend their sole
and mutual interests. Each Party shall bear its own
expenses related to the defense unless otherwise
agreed at the time.
(b) If the Product which is the subject of the action or
proceeding is an i-STAT Product, i-STAT will be
financially responsible for any judgment and have the
first right to take the lead in the coordinated
defense.
(c) If the Product which is the subject of the action or
proceeding is a Program Product and it is clear that
the predominant aspect of the Product at issue was
contributed by one Party rather than the other, then
the contributing Party will be financially
responsible for any judgment and have the first right
to take the lead in the coordinated defense.
(d) If the Product which is the subject of the action or
proceeding is a Program Product and it is not clear
that the predominant aspect of the Program Product at
issue was contributed by one Party rather than the
other, then the Parties will share equally in any
judgment and negotiate in good faith as to which
Party takes the lead in the coordinated defense.
(e) In any event, with respect to each such legal action
or administrative proceeding:
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(i) Neither Party shall have the right to enter
into any financial, commercial or other
settlement with such Third Party without the
consent of the other Party, which consent
shall not be withheld unreasonably.
(ii) Neither Party shall have the right to make
any adverse admissions relating to
infringement without the consent of the
other Party, which consent shall not be
withheld unreasonably.
(iii) Each Party, upon notice to the other Party,
shall have the right to mitigate potential
damages as such Party deems appropriate,
including, without limitation, stopping the
manufacture of the alleged infringing
Product or action, stopping
commercialization of such alleged infringing
Product or action, stopping
commercialization of such alleged infringing
Program Product or action, redesigning the
alleged infringing Product or action, and
reconfiguring the alleged infringing Product
or action. Any such mitigation taken by a
Party shall not be used against that Party
when determining that Party's performance
under this Agreement.
(f) Any lead taken by a Party under this Section 13.5
relating to defending the other Party in such legal
action or administrative proceeding shall not be used
against the non-lead Party when determining the
non-lead Party's performance under this Agreement.
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Only if a Party fails to perform its obligations under this Section
13.5, shall the other Party be entitled to indemnification for such obligations
pursuant to the provisions of Article 15.
13.6 Co-Labeled Product. i-STAT shall sell Products identified by
an Xxxxxx trademark or trade name only to Xxxxxx and its
Affiliates or to an Xxxxxx-appointed sub- distributor.
13.7 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR ANY AMOUNTS REPRESENTING ITS LOSS OF PROFITS, LOSS
OF BUSINESS, OR INDIRECT, SPECIAL, EXEMPLARY, CONSEQUENTIAL OR
PUNITIVE DAMAGES, ARISING FROM THE PERFORMANCE OR
NONPERFORMANCE OF THIS AGREEMENT OR ANY ACTS OR OMISSIONS
ASSOCIATED THEREWITH OR RELATED TO THE USE OF ANY ITEMS OR
SERVICES FURNISHED HEREUNDER, WHETHER THE BASIS OF THE
LIABILITY IS BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE
AND STRICT LIABILITY), STATUTES OR ANY OTHER LEGAL THEORY,
EXCEPT FOR A BREACH BY i-STAT OR ITS AFFILIATES OF SECTION
14.6.
ARTICLE 14 - REPRESENTATIONS AND WARRANTIES
14.1 i-STAT Product Representations and Warranties. i-STAT
represents and warrants that Product delivered to Xxxxxx
hereunder shall be:
(a) manufactured in accordance with cGMPs and the
Specifications;
(b) free from defects in material and workmanship until
one (1) year after date of shipment for the Analyzer
and/or the shelf life for Cartridges and Ancillary
Products having an expiration date (the "Warranty
Period");
(c) free and clear of any Third Party security interest,
lien or encumbrance;
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(d) manufactured in compliance with all applicable
foreign, federal, state and local laws and
regulations in the location of manufacture; and
(e) Year 2000 Compliant as of July 1, 1999 in accordance
with the following terms:
(i) all Product that operate on date data software
and hardware;
(ii) all hardware and software supplied by i-STAT;
and
(iii) all hardware and software used in i-STAT's
manufacturing process of Product shall have no lesser
functionality with respect to records containing
dates before or after January 1, 2000, than
previously with respect to dates prior to January 1,
2000 ("Year 2000 Compliant").
With respect to clauses (a), (b) and (d) of this Section 14.1,
the Parties acknowledge and agree that unless i-STAT fails to deliver
Product consistently to Xxxxxx, at a mutually agreed upon level, any
Product not conforming to clauses (a), (b) and (d) of this Section 14.1
shall be handled in accordance with Section 14.2 and shall not
constitute a material breach of this Agreement.
14.2 Product Replacement or Repair. At its option, i-STAT may
repair or replace Products returned during the Warranty Period
which fail to meet the warranty set forth in Section 14.1
("Defective Products"). Customers in the United States may
return Defective Products directly to i-STAT. Customers
outside the United States shall return Defective Products to
Xxxxxx, its Affiliates or sub-distributors for return to
i-STAT. i-STAT shall accept returned Products in accordance
with the terms in Schedule 14.2. i-STAT shall bear the cost of
return
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shipment of Defective Products to i-STAT and the cost of
shipping repaired or replaced Products to the customer or
Xxxxxx its Affiliates and sub-distributors, as the case may
be.
14.3 Exclusions. i-STAT shall have no obligations with respect to
any defects, damage, or nonconformances of Products that
result from: improper installation by other than i-STAT or an
i-STAT-approved Third Party, operation or maintenance;
unauthorized repair; tampering, unusual environmental
operating conditions outside the Specifications; or from
accidents, or acts of God; or other events of force majeure,
as described in Section 20.1, after Delivery. If any Products
returned for repair or replacement are not defective or
nonconforming or contain defects or a nonconforming condition
caused by a factor outside the scope of i-STAT's warranty, ***
i-STAT's normal service rate for (a) services performed with
respect to such defective returned units, or (b) "no fault
found" with respect to returned units which are not defective,
but only for such returned Products *** stated as a percentage
of returns to total units of Products sold by i-STAT. The
Parties shall meet at least every six (6) months to review the
status of the costs of returns and shall modify the percentage
stated above, as is appropriate.
14.4 Limitation on Warranties. i-STAT MAKES NO WARRANTIES REGARDING
THE PRODUCTS OTHER THAN THE EXPRESS WARRANTIES IN THIS ARTICLE
AND THERE SHALL BE NO IMPLIED OR STATUTORY WARRANTIES,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.
14.5 Patent Representations and Warranties.
*** Confidential treatment requested
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(a) Except as provided in Schedule 14.5, i-STAT represents and
warrants to Xxxxxx as of the Signing Date, and as of the
Closing Date as though restated on and as of the Closing Date,
that:
(i) to its knowledge, there are no Third Party patents,
trademarks or other proprietary rights which are valid and
which would be infringed by making, having made, using,
selling, offering for sale or importing i-STAT Products in
the Territory in accordance with the terms of this
Agreement;
(ii) at no time prior to the termination of the last to
terminate of the Alliance Agreements shall i-STAT enter
into any transaction providing for debt financing which
would (A) result in the imposition of a lien, license,
security interest or other encumbrance upon or transfer of
any of i-STAT's Know-How and Technology, or (B) prohibit or
materially impair i-STAT from fulfilling its obligations
under the Alliance Agreements; and
(iii) to its knowledge, i-STAT is not, and as a result of the
execution and delivery of the Alliance Agreements or the
performance of i-STAT thereunder will not be in violation
of or lose any rights pursuant to any license, sublicense
or agreement previously provided to a Third Party.
14.6 Special Representations Warranties. i-STAT represents and warrants to
Xxxxxx that as of the Signing Date and as of the Closing Date as
though restated on and as of the Closing Date as follows:
(a) The execution, delivery and performance of this Agreement by
i-STAT shall not be in conflict with or result in the breach
of any obligations of i-STAT under any
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agreement by and between i-STAT and FUSO and i-STAT and HP,
respectively, including, without limitation, the FUSO
Agreement, the FUSO Development Agreement, the HP Stock
Purchase Agreement, the FUSO License Agreement, the HP
Agreement or the HP License Agreement;
(b) There is no provision in the FUSO Agreement that will prevent
Xxxxxx from obtaining exclusive distribution rights to i-STAT
Products in accordance with the terms of Section 2.2;
(c) FUSO only has non-exclusive rights to i-STAT Products in the
Co-exclusive Territory and FUSO has no rights to i-STAT
Products outside the Co-exclusive Territory; and
(d) The representations and warranties of clauses (a), (b), and
(c) of this Section 14.6 shall survive for so long as the
agreement between i-STAT and HP or FUSO, respectively,
pertaining to such representations and warranties is still in
effect.
14.7 General Representations and Warranties. Each Party represents and
warrants to the other Party as of the Signing Date and as of the
Closing Date as though restated on and as of the Closing Date, as
follows:
(a) It is a corporation duly organized and validly existing under
the laws of its state of incorporation;
(b) It has the power and authority to execute and deliver the
Alliance Agreements and to perform its obligations thereunder;
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(c) The execution, delivery and performance by it of the
Alliance Agreements and its compliance with the terms
and provisions thereof does not and will not conflict
with or result in a breach of any other agreement or
relationship; and
(d) All hardware and software used in the performance of
its duties and obligations hereunder shall be Year
2000 Compliant no later than July 1, 1999, which
representation shall survive the Closing.
ARTICLE 15 - GENERAL INDEMNIFICATION
15.1 i-STAT Indemnification. i-STAT shall indemnify, defend and
hold Xxxxxx and its Affiliates and their officers, directors,
employees, and representatives harmless from and against any
and all claims, causes of action, suits, proceedings, losses,
damages, demands, fees, expenses, fines, penalties and costs
(including reasonable attorney's fees) arising out of, related
to or in connection with: (a) the manufacture, shipment or use
of Product; (b) the breach of i-STAT's warranties,
representations or covenants set forth in this Agreement; (c)
the termination by i-STAT of any distributor of Product in the
Territory; and/or (d) the wrongful or negligent acts or
omissions on the part of i-STAT's employees, agents or
representatives.
15.2 Xxxxxx Indemnification. Xxxxxx shall indemnify, defend and
hold i-STAT and its Affiliates and their officers, directors,
employees, and representatives harmless from and against any
and all claims, causes of action, suits, proceedings, losses,
damages, demands, fees, expenses, fines, penalties and costs
(including reasonable attorney's fees) arising out, related to
or in connection with: (a) the breach of Xxxxxx'x warranties,
representations or covenants set forth in
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this Agreement; or (b) the wrongful or negligent acts or
omissions on the part of Xxxxxx'x employees, agents or
representatives.
15.3 Cooperation. Each Party shall promptly notify the other Party
of any claim or potential claim covered by the indemnification
provisions of this Article 15 and under Section 2.10, and
shall include sufficient information to enable the other Party
to assess the facts. Each Party shall cooperate with the other
Party in the defense of all such claims. No settlement or
compromise shall be binding on a Party without such Party's
prior written consent, which consent shall not be unreasonably
withheld or delayed.
15.4 Insurance. i-STAT shall procure and maintain during the Term
comprehensive commercial liability insurance, including
contractual and products liability coverage, in aggregate
annual limits of $20,000,000. i-STAT shall cause Xxxxxx and
its Affiliates to be named as an additional insured on such
policies and i-STAT policies shall be primary with respect to
any indemnification of Xxxxxx and its Affiliates hereunder.
i-STAT shall provide Xxxxxx with not less than thirty (30)
days' prior written notice of any cancellation, modification
or reduction of coverage under such policies.
ARTICLE 16 - INTENTIONALLY OMITTED
ARTICLE 17 - TERM AND TERMINATION
17.1 Term. Subject to early termination as set forth in this
Article 17, this Agreement shall begin on the Signing Date and
shall continue until December 31, 2003. Thereafter, this
Agreement shall be extended automatically for one (1)
additional Contract Year at a time, unless
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either Party provides the other Party with not less than
twelve (12) months' prior written notice of such Party's
decision to terminate this Agreement.
17.2 Termination For Cause. Either Party may terminate this
Agreement for cause upon written notice to the other Party in
the event the other Party: (a) appoints a receiver, executes
an assignment for the benefit of creditors or files or
otherwise becomes subject to bankruptcy or insolvency
proceedings; or (b) materially breaches this Agreement and
fails to cure such breach within sixty (60) days after receipt
of written notice of breach from the non-breaching Party, as
such cure period may be extended for such additional period as
the non-breaching Party reasonably determines that the
breaching Party is diligently pursuing a cure of such breach.
17.3 By i-STAT For Growth Deficiencies. i-STAT shall have the right
to terminate this Agreement at the end of the third Contract
Year only if Xxxxxx ***. In the event of termination pursuant
to this Section 17.3, Xxxxxx and i-STAT shall continue to
perform their obligations hereunder for a period *** to enable
i-STAT to transition back into the business. (See example in
Schedule 17.3)
17.4 By Xxxxxx for Change of Control. Xxxxxx shall have the right
to terminate this Agreement upon twelve (12) months' prior
written notice to i-STAT in the event of a Change of Control
of i-STAT.
17.5 Continuation of Force Majeure. Either Party may terminate this
Agreement in the event a force majeure event continues for one
hundred eighty (180) consecutive days and prevents a Party
from materially performing its obligations under this
Agreement.
*** Confidential treatment requested
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17.6 Delay of Closing. This Agreement may be terminated, and the
transactions contemplated abandoned, by either Party by
written notice to the other Party if the Closing Date does not
occur on or before the date which is one hundred and thirty
(130) days from the Signing Date.
17.7 Accrued Obligations. Termination, expiration, cancellation or
abandonment of this Agreement through any means and for any
reason shall not relieve the Parties of any obligation
accruing prior thereto and shall be without prejudice to the
rights and remedies of either Party with respect to any
antecedent breach of any of the provisions of this Agreement.
17.8 Additional Remedies for Breach. Notwithstanding the terms and
conditions of Section 17.2, neither Party shall be obligated
to terminate this Agreement in the event the other Party
materially breaches this Agreement. The non-breaching Party
shall have the right to seek, in accordance with Section 21.6,
other remedies available to it at law and equity to recover
for such breach, without having to terminate the Agreement.
ARTICLE 18 - CONSEQUENCES OF TERMINATION
18.1 Buy-out of Assets and Inventory. In the event of any
termination of this Agreement pursuant to Article 17, i-STAT
shall, within ninety (90) days after such termination,
purchase from Xxxxxx and its Affiliates *** the Analyzers that
are placed with customers by Xxxxxx and its Affiliates to
Third Parties and at Xxxxxx'x and its Affiliates' *** any
inventory of Product held by Xxxxxx or its Affiliates.
18.2 Termination Fee. In the event of any termination of this
Agreement pursuant to Article 17, except for termination by
i-STAT for cause under Section 17.2 or Section 17.3, and
*** Confidential treatment requested
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except for termination by Xxxxxx under Section 17.1, i-STAT
shall pay to Xxxxxx upon the effective date of such
termination, a one-time termination fee *** which fee shall
not be deemed a penalty.
18.3 Prepayment Refund. In the event of any termination of this
Agreement pursuant to Article 17, except for termination by
i-STAT for cause under Section 17.2 or Section 17.3, i-STAT
shall refund to Xxxxxx in cash, upon the effective date of
such termination, any Prepayments made to i-STAT and not
credited to Abbott pursuant to Section 5.5.
18.4 Residual Payments. In the event of any termination of this
Agreement pursuant to Article 17, except for termination by
i-STAT for cause under Section 17.2 or Section 17.3, and
except for termination by Abbott under Section 17.1, and in
consideration of Abbott efforts in developing i-STAT Product
sales and goodwill during the Term, i-STAT shall pay for five
(5) years following the effective date of termination of this
Agreement, a residual to Abbott, equal to the percentages
listed below for the appropriate year, based on Xxxxxx'x and
its Affiliates' and sub-distributors' Net Sales of Products
*** during the final twelve (12) months of the Agreement prior
to such termination. i-STAT shall make the residual payments
to Abbott in United States dollars by check or wire transfer
on the first five (5) anniversaries of the termination of this
Agreement. The residual payment schedule is as follows:
Year Percentage of Net Sales
1 ***
2 ***
3 ***
4 ***
5 ***
*** Confidential treatment requested
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ARTICLE 19 - CONFIDENTIALITY AND PUBLIC ANNOUNCEMENTS
19.1 Confidentiality. The Parties acknowledge and agree that during
the Term, each of them and their Affiliates may exchange
Confidential Information, and the disclosure and use of any
such Confidential Information shall be governed by the
provisions of this Article 19 and not by the provisions of the
Confidentiality and Standstill Agreement between the Parties,
dated March 11, 1998. Each Party shall use the Confidential
Information of the other Party only for the purpose of the
activities contemplated by this Agreement and shall not
disclose such Confidential Information to a Third Party except
in accordance with the provisions of this Agreement. The
Parties shall ensure that their Affiliates keep all
Confidential Information exchanged hereunder confidential in
accordance with the provisions hereof as though the Affiliates
were parties hereto. This provision shall remain in effect for
a period of three (3) years after termination or expiration of
this Agreement for all Confidential Information excluding
Trade Secrets. Trade Secrets shall be kept confidential by the
Receiving Party (as defined in Section 19.2 hereof) according
to the terms set forth in Section 19.2.
19.2 Handling of Trade Secrets. During the course of its
performance hereunder, a Party (the "Disclosing Party") may
desire or be requested to disclose Confidential Information to
the other Party (the "Receiving Party"), which the Disclosing
Party considers a Trade Secret. In such event, the Disclosing
Party first shall inform the Receiving Party, on a
non-confidential basis, the general nature of the Trade Secret
information. The Receiving Party shall have ten (10) days to
decide whether it wishes to have such Trade Secrets disclosed
to it and to inform the Disclosing Party in writing that it
wishes to receive such a disclosure. Any Trade Secrets so
disclosed between the Parties shall be marked "Trade Secret,"
and the Receiving Party shall not
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disclose or use such Trade Secret for the Term and thereafter
except as expressly permitted under this Agreement. In the
event the Disclosing Party discloses the Trade Secrets to the
Receiving Party without written approval of the Receiving
Party and/or without appropriately marking such information as
"Trade Secret" that Trade Secret shall be handled as
Confidential Information under Section 19.1.
19.3 Confidential Treatment. i-STAT shall seek confidential
treatment for the terms and conditions of this Agreement to
the fullest extent permitted by the SEC and any other
governmental agency or self-regulatory organization to which
i-STAT provides a copy of this Agreement or any of the other
Alliance Agreements. Prior to seeking confidential treatment
from the SEC or any other governmental agency or
self-regulatory organization for any such document, i-STAT
shall consult with Abbott and Xxxxxx'x counsel and provide
them with a reasonable opportunity to request the inclusion of
specified provisions in any request by i-STAT for confidential
treatment.
19.4 Public Announcements. Neither Party shall make any public
announcement concerning the Alliance Agreements, nor make any
public statement which includes the name of the other Party or
any of its Affiliates, or otherwise use the name of the other
Party or any of its Affiliates in any public statement or
document without the consent of the other Party, which consent
shall not be unreasonably withheld except: (i) as may be
required by law or judicial order, without the consent of the
other Party, which consent shall not be unreasonably withheld;
or (ii) either Party may include in a subsequent public
statement or document, information regarding the Alliance
Agreements which has already been approved by the other Party.
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ARTICLE 20 - FORCE MAJEURE
20.1 Event of Force Majeure. Neither Party shall be held in breach
of this Agreement for failure to perform any of its
obligations hereunder and, subject to the terms and conditions
of Section 17.5, the time required for performance shall be
extended for a period equal to the period of such delay,
provided that such delay has been caused by or is a result of
any acts of God; acts of the public enemy; civil strife; wars
declared or undeclared; embargoes; labor disputes, including
strikes, lockouts, job actions or boycotts; fires; explosions;
floods; shortages of material or energy; events caused by
reason of laws or regulations or orders by any government,
governmental agency or instrumentality or by any other
supervening unforeseeable circumstances beyond the reasonable
control of the Party so affected. The Party so affected shall:
(a) give prompt written notice to the other Party of the
nature and date of commencement of the force majeure event and
its expected duration; and (b) use its reasonable best efforts
to relieve the effect of such cause as rapidly as possible.
ARTICLE 21 - MISCELLANEOUS
21.1 Relationship of the Parties. The relationship of the Parties
under this Agreement is that of independent contractors.
Nothing contained in this Agreement shall be construed so as
to constitute the Parties as partners, joint venturers or
agents of the other. Neither Party or its Affiliates has any
express or implied right or authority under this Agreement to
assume or create any obligations or make any representations
or warranties on behalf of or in the name of the other Party
or its Affiliates.
21.2 Assignment. Neither Party may assign its rights or obligations
under this Agreement without the prior written consent of the
other Party, which consent shall not be
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unreasonably withheld; provided, however, that Abbott may
assign this Agreement, in whole or in part, without such
consent, to an Affiliate of Abbott; and provided, further,
that Abbott shall promptly notify i-STAT of any such
assignment. Any permitted assignee shall assume all
obligations of its assignor under this Agreement. No
assignment shall relieve any Party of responsibility for the
performance of any obligation which such Party may have or
incur hereunder.
21.3 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of each of the Parties and its successors and
permitted assigns.
21.4 Entire Agreement. This Agreement, including the Schedules,
which are incorporated herein by reference, together with the
other Alliance Agreements and all documents delivered in
connection therewith, set forth the entire understanding of
the Parties concerning the subject matter hereof and
supersedes all written or oral prior agreements or
understandings with respect thereto.
21.5 Governing Law. This Agreement and the legal relations between
the Parties hereunder shall be construed, interpreted and
governed by the law of the State of New York, without regard
to its conflict of laws principles.
21.6 Dispute Resolution. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be
resolved through the alternate dispute resolution procedure
described in Schedule 21.6; provided, however, that this shall
not prevent a Party from seeking and obtaining injunctive
relief in a court of competent jurisdiction.
21.7 Notices. All notices hereunder shall be in writing and shall
be: (a) delivered personally; (b) mailed by registered or
certified mail, postage prepaid; (c) sent by overnight
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courier; or (d) sent by facsimile or express mail to the
following addresses of the respective Parties:
If to Abbott: Xxxxxx Laboratories
Director, Acquisitions and Technology Assessment
D-9RK, Building AP6C
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
with copy to: Divisional Vice President
Domestic Legal Operations
X-000, Xxxxxxxx XX0X
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
If to i-STAT: i-STAT Corporation
President and Chief Executive Officer
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile Number: (000) 000-0000
with copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile Number: (000) 000-0000
Notice shall be effective: (i) upon receipt if personally delivered; (ii) on the
third Business Day following the date of mailing if sent by registered or
certified mail; (iii) on the second Business Day following the date of delivery
to the express mail service if sent by express mail; and (iv) on the first
Business Day following the date of transmission or delivery to the overnight
courier if sent by facsimile or overnight courier. A Party may change its
address listed above by sending notice to the other Party.
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21.8 Severability. If any provision of this Agreement for any
reason shall be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall
not affect any other term or provision hereof, and this
Agreement shall be interpreted and construed as if such term
or provision, to the extent the same shall have been held to
be invalid, illegal or unenforceable, had never been contained
herein.
21.9 Use of Funds. i-STAT has no present plan or intention to use
the funds from the sale of stock to Abbott under the Stock
Purchase Agreement and the payment of the Prepayments
hereunder ("Funds") for any purpose other than the improvement
and expansion of i-STAT's manufacturing operations, the
development of New Products and Program Products, working
capital, and general corporate purposes consistent with the
foregoing. Abbott acknowledges that i-STAT's plans and
intentions must of necessity be subject to change based on
numerous factors, including the degree of market acceptance of
Products, technological developments, competitive conditions
and other factors which require i-STAT to keep the interests
of all its shareholders in mind. Subject to the foregoing,
i-STAT acknowledges the importance of applying the Funds
towards the support of its strategic relationship with Abbott,
as evidenced by the Alliance Agreements.
21.10 Interpretation. When a reference is made in this Agreement to
Sections or Schedules, such references shall be to a Section
or Schedule to this Agreement unless otherwise indicated. The
words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words
"without limitation." The table of contents and headings
contained in this Agreement have been inserted for convenience
of reference only and shall not be relied upon in construing
this Agreement. Use of any gender herein to refer to any
person shall
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be deemed to comprehend masculine, feminine, and neuter unless
the context clearly requires otherwise.
21.11 Waiver or Modification of Agreement. No waiver or modification
of any of the terms of this Agreement shall be valid unless in
writing and signed by authorized representatives of both
Parties. Failure by either Party to enforce any of its rights
under this Agreement shall not be construed as a waiver of
such rights nor shall a waiver by either Party in one or more
instances be construed as constituting a continuing waiver or
as a waiver in other instances.
21.12 Survival. Expiration or early termination of this Agreement
shall not relieve either Party of its obligations incurred
prior to such expiration or early termination. The following
provisions shall survive expiration or early termination of
this Agreement: Article 1, Sections 2.10, 5.3, 5.4, 5.8,
Articles 10 and 12, Sections 13.5, 13.6 and 13.7, Articles 14
and 15, Section 17.7, Article 18, Sections 19.1, 19.2, 21.5,
21.6, 21.7 and 21.12.
21.13 Headings. The captions to the Articles and Sections in this
Agreement are inserted for convenience only and are not a part
hereof.
21.14 Counterparts. This Agreement may be executed in two (2)
original counterparts, each of which shall be deemed an
original, but both of which together shall constitute one and
the same instrument.
21.15 Mutual Drafting. This Agreement is the joint product of Abbott
and i-STAT, and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of the Parties
and their respective legal counsel and advisers and any rule
of construction that a document shall be interpreted or
construed against the drafting party shall not be applicable.
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IN WITNESS WHEREOF, each Party has caused this Marketing and
Distribution Agreement to be executed on its behalf by its duly authorized
officer as of the Signing Date.
XXXXXX LABORATORIES i-STAT CORPORATION
By:/s/ Miles X. Xxxxx By:/s/ Xxxxxxx X. Xxxxxxx
Name: Miles X. Xxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President Title: President and Chief Executive Officer
Date: August 3, 1998 Date: August 3, 1998
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